1. The respondent No.1 has entered caveat, notice is waived, service is complete.
2. Mr.Naganand, learned Senior Counsel submits that notice to respondent No.2 be dispensed with, as he is the Sole Arbitrator, Notice is dispensed with at petitioner s risk.
3. Even though the matter is listed for preliminary hearing, with consent, it is taken up for final disposal.
4. Shorn of details, the facts can be stated as under:
The petitioner had under taken a project ol construction ol multi-storied residential apartments in Electronic City, Bangalore and the said project was known as Ajmera Infinity @ Neeladri. The petitioner had invited a tender for undertaking the civil works for the proposed Multi storied residential complex, which is developed by the petitioner. The tender of respondent No.1 has been accepted and it was reduced by way of a Memorandum of Understanding fixing the time schedule for completion of the said project with a default clause.
5. Suffice it to note that the petitioner terminated the contract awarded in favour of respondent No. 1 pursuant to a letter dated 07.06.2010 inasmuch as respondent No. 1 did not venture to complete the project within the agreed time. As a result of such termination certain disputes have arisen between the petitioner as well as the respondent No. 1 with respect to the contract and the amount due. The respondent No.1 initiated proceedings under Section 11 ol the Arbitration and Conciliation Act. 1996 seeking to appoint an Arbitrator.
Accordingly an Arbitrator is appointed. The proceedings before respondent No.2 commenced on 24.11.2011. The respondent No.l files a claim on 29.12.2011 and the matter was deferred to 2.2.2012 for filing of statement of objections and also counter claim if any. Thereafter, the matter was adjourned to 25.01.2012 and further three weeks time was granted for filing of objections as well as counter claim. Thereafter, the matter was being adjourned from time to time and eventually when the matter was listed on 11.5.2012 the counter claim was lodged. The said counter claim has been rejected by respondent No.2 on the ground that the last date ior filing of the counter claim was 17.3.2012 and the petitioner had not sought for extension ot time lor filing of counter claim. Hence, the petitioner is before this Court.
6. I have heard Mr.Naganand. learned Senior Counsel appearing for the petitioner as well as Mr.Arvind Kamath, learned counsel appearing for Respondent No.1.
7. Mr.Naganand, learned Senior Counsel appearing for the petitioner submits that since the applicability of Code of Civil Procedure is excluded pursuant to Section 19 of the Act, there is no time limit lor filing of the counter claim. He submits that the time was extended to file the counter claim as well as the statement of objections till 17.3.2012 on which date it could not be filed. The counter claim is filed on 19.5.2012. He submits that respondent No.2 was too technical in declining to accept the counter claim. He further submits that no serious progress Is also made in the arbitral proceeding inasmuch as only issues have been framed and the matter is deferred for marking of the documents.
8. Mr.Arvind Kamath. learned counsel appearing for respondent No.1 submits that even though the Code of Civil Procedure is not applicable to arbitral proceeding, but nevertheless, sufficient time was granted to the petitioner to file his statement of objections as well as the counter claim. Indeed, he submits that it was open for the petitioner to file counter claim along with statement of objections. That having not been done respondent No.2 was justified in rejecting the said application. He further submits that three months have lapsed from the time, time was granted to file the counter claim. Hence, justifies the impugned orders.
9. I have given my anxious consideration to the submissions made by both the learned counsel. however I hat has not been done. In between 17.3.2012 and 11.4.2012 there was another sitting on 24.3.2012 on which date the petitioner could have Med the counter claim.
Apparently, pursuant to an order passed by this Court an Arbitration is appointed to resolve the dispute between the parties.
Indeed, it is to be noticed that the time to file the statement of objections as well as the counter claim was fixed on 26.12.!]. The matter was deferred to 2.2.2012. The statement of objections were not filed on 2.3.2012 Undoubtedly in between time was extended to file the statement of objections on 25.1.2012 and 2.2.2012 and 24.2.2012. Indeed, it was always open for the petitioner to file the counter claim, if any. But.
12. Indeed, as could be seen from Section 19 of the Act. which would speak about the determination of rules of procedure, the exclusion of the applicability of the Code oi Civil Procedure as well as the Indian Evidence Act with reference to the Arbitral Tribunal is to be found. Undoubtedly, under Order 8 of Code of Civil Procedure a counter claim is to be filed before the issues are framed. But however, having regard to l he fact that the Code of Civil Procedure is not applicable to the arbitral proceedings reasonable time is required to be assessed. The purpose of counter claim is to avoid multiplicity of proceedings.
13. 11. is no doubt true that certain correspondence has taken place between the petitioner as well as the respondent regarding the loss sustained by either of the parties. But however, the basis of counter claim is only alter the arbitral proceedings had commenced.
14. I am of the view that the delay per se is not enormous so as to warrant rejection of the counter claim. it is not as if the arbital proceedings have J reached a stage where entertaining the counter claim would put the clock back. It is only at a nascent stage inasmuch as the issues are framed.
It is submitted by the learned Senior Counsel that draft issues have been filed on 11.5.2012.
Indeed, as observed the proceedings are at a nascent stage. Hence, I am of the view that the order passed by the Sole Arbitrator is liable to be interfered inasmuch all claims relating to the dispute are required to be thrashed out in one stretch without allowing either of the parties to have recourse to another proceeding. There is laxity is on the part of the petitioner in filing the counter claim inasmuch as sufficient time was granted after the arbitral proceedings have been commenced. The respondent No.1 is entitled for costs.
Hence, the following order is passed:
(i) Petition is allowed.
(ii) The impugned order passed by the Sole Arbitrator rfcjeettag the request of the petitioner for lodging a counter claim is set aside.
(iii) The Sole Arbitrator shall take the counter claim on file and decide the dispute with reference to the claim lodged by the petitioner as well as the counter claim.
(iv) Costs quantified at Rs. 1.00.000/- (Rupees One lakh only).
(v) Objections to the counter claim, if any by respondent within four weeks from today.
(vi) Rejoinder m the statement of objections by petitioner, if any. within two weeks thereafter.